EUR/USD Mid-Session Technical Analysis for January 7, 2021 from wisepowder's blog
EUR/USD Mid-Session Technical Analysis for January 7, 2021
The Euro is edging lower against the U.S. Dollar on Thursday, hovering just below its highest level in nearly three years as U.S. Treasury yields rose after Democrats won control of the U.S. Senate, clearing the way for possible larger fiscal stimulus under President-elect Joe Biden.To get more news aboutWikiFX, you can visit wikifx official website. Reuters said that analysts generally assume a Democrat-controlled Senate would be a net positive for economic growth globally and thus for most risk assets, but negative for bonds and the dollar as the U.S. budget and trade deficits may widen further. Economic sentiment in the Euro Zone ticked up last month but inflation held in negative territory before what is likely to be a slow rise this year as some tax cuts are reversed, oil prices rise and the economy starts to recovery. With the economy likely shrinking again in the fourth quarter and inflation below zero since August, the ECB already approved a new package of stimulus measures in December, extending copious asset buys well into 2022 to insulate an economy likely to face permanent damage from the pandemic. [fx-article-ad]Daily Swing Chart Technical Analysis The main trend is down according to the daily swing chart. A trade through 1.2349 will signal a resumption of the uptrend. The main trend will change to down on a move through 1.2025. The minor trend is also up, but a new minor top was formed at 1.2349. The minor range is 1.2025 to 1.2349. Its 50% level at 1.2187 is a potential downside target. Since the main trend is up, buyers are likely to come in on a test of this level. The short-term range is 1.1800 to 1.2349. Its 50% level at 1.2074 is a more important support level. Daily Swing Chart Technical Forecast A strengthening U.S. dollar could pressure the top-heavy Euro for a couple of sessions. The price action indicates that investors are growing a little uncomfortable buying the EUR/USD at current levels. If theyre not buying strength then they probably want to value. The first minor value area is 1.2187. Rising U.S. Treasury yields should continue to be the catalyst weighing on the single-currency and supporting the greenback. If there is a breakout over 1.2349 then this would put the EUR/USD on track for a near-term test of the April 17, 2018 main top at 1.2413.
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